In short
- Meme coins, including SHIB, PEPE, PENGU, BONK and WIF, are leading crypto’s recovery after Friday’s crash, bringing the total market cap for meme coins to $69 billion.
- Friday’s selloff caused nearly $20 billion in liquidations, the largest single-day breakout in crypto history, as Bitcoin fell from $121,000 to $109,000 before rebounding.
- Analysts told Decrypt that the recovery “makes sense” because the assets that crash the hardest tend to bounce back faster.
Meme coins led a recovery rally on Monday morning, with traders piling into risky assets as tensions between the US and China cooled and helped crypto markets bounce back after experiencing the worst liquidation in history.
Dogecoin (DOGE) rose 11.9% to $0.21 over the past 24 hours, while other popular meme coins posted even stronger gains, according to CoinGecko data.
Dogwifhat (WIF) rose 18.4%, Pudgy Penguins (PENGU) rose 17.5% and Pepe (PEPE) climbed 13.2%.
Bonk (BONK) and Shiba Inu (SHIB) rose 15.3% and 9.4% respectively, with the total market cap for meme coins now at $68.8 billion, up 12.6% on the day.
The recovery comes after Friday’s devastating sell-off, which saw Bitcoin (BTC) fall from $121,000 to $109,000, wiping out nearly $20 billion in liquidations of all digital assets in a single day.
By Monday morning, BTC was back up to $115,227, up 2.9% on the day, while Ethereum (ETH), BNB (BNB) and Solana (SOL), rose 8.4%, 12.2% and 8.7% respectively, according to CoinGecko.
“It makes sense. The flash crash was a temporary glitch caused by the back-to-back liquidations, and everyone expected a recovery,” said Arjun Vijay, founder of crypto exchange Giottus. Declutter.
“During the recovery, the riskiest assets and those that have crashed the most are expected to recover the maximum,” he said. “So it’s no surprise that people are betting on meme coins, and this leads to a virtuous cycle.”
Friday’s Crypto Crash
The crash was triggered by President Trump’s announcement of a “massive increase” in tariffs on Chinese imports after canceling a planned meeting with Chinese President Xi Jinping, a move he acknowledged could be “potentially painful” for Americans.
The spokesperson for the Chinese Ministry of Commerce said this on Sunday noted that “the US has long overestimated the concept of national security, abused export controls and taken discriminatory measures against China.”
Tensions appeared to ease this weekend, however, when Trump posted on Truth Social Sunday that the US wants to “help China, not harm it.” Nevertheless, users of the prediction market Myriad estimate only a 13.5% chance that he will visit China before the end of the year.
“For the medium to long term, this decline in risk is actually healthy because it has removed the toxic debt burden in the market: short-term pain, long-term gain,” Charmaine Tam, head of OTC sales and trading at Hex Trust, told me. Declutternoting how “altcoins bore the brunt of the whiplash last Friday,”
Tam noted how “the institutional plumbing held up” even amid the sell-off, with Bitcoin’s dominance “failing to regain 60.5%” – a sign, she said, that altcoins could lead as liquidity recovers.
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